Telstra and NBN Co make $11 billion deal to speed up the NBN rollout

'Old' copper wiring for 'new' broadband rollout

In 2011, Labor contracted telstra to decommission their copper network for $11 billion as part of the National Broadband Network (NBN) roll out. Yesterday, the Coalition signed a new definitive agreement between the NBN and Telstra to transfer ownership of the telco's ageing copper network to the NBN incrementally, rather than decommission it.

In a press release, NBN Co stated that it would acquire segments of the copper wire network to deliver broadband, when it is was the most 'cost effective' and 'fastest' option. "This deal will bring down the overall cost of building the NBN and enable us to complete the rollout much earlier than originally anticipated", said Bill Morrow, NBN Co's CEO.

Telstra will also transfer portions of its Hybrid Fibre Coaxial (HFC) network to NBN Co, which was originally used to distribute cable television.

Faster broadband sooner? Maybe...?

Unsurprisingly, Malcolm Turnbull believes the outcome is good for everyone and will allow the NBN flexibility where it needs it. "This should be seen as a win-win. A win for the taxpayer, a win for the consumers, a win for NBN Co and a win for Telstra shareholders."

Jason Clare, Labor's communication spokesman, said that the program may be good for the Government and Telstra but that it would lead to a sub-standard network. "The losers in this deal are Australians, millions of Australians who will end up with a second-rate broadband network", said Clare.

NBN Co stated that their goal was to make all homes and businesses serviceable by 2020 with download speeds of at least 25 megabits per second.

NBN Co also signed a similar deal yesterday to acquire elements of the Optus HFC cable network. In a press release Optus stated that the size of the deal is comparable to the value outlined in the 2011 Optus HFC Subscriber Agreement, or approximately $800 million.

Both Optus and Telstra will continue to supply services to customers who are yet to me migrated to the NBN. Both the agreements must still be approved by the Australian Competition and Consumer Commission and the Australian Taxation Office before they are finalised.

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